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HOUGHTON MIFFLIN COMPANY REPORTS RECORD EARNINGS

 BOSTON, Oct. 14 /PRNewswire/ -- Houghton Mifflin Company (NYSE:HTN) today reported record third-quarter net income of $41.5 million, or $3 per share. The 1993 third-quarter earnings represented an increase of more than 22 percent over the third quarter of 1992, when net income of $34.0 million, or $2.46 per share, was reported. Increased net sales and benefits from the second quarter's restructuring activities both contributed to the quarter's record performance.
 For the first nine months of the year, net income before special charges and the extraordinary loss incurred in connection with prepayment of long-term debt was $37.7 million, or $2.73 per share. This compared with $31.7 million, or $2.25 per share, before accounting changes for the comparable period in 1992. Net income for 1993 after the special charges and refinancing cost was $30.1 million, or $2.18 per share, compared with 1992's restated nine-month net income of $17.0 million, or $1.21 per share.
 Net sales for the third quarter ended Sept. 30, 1993, were $208.5 million, a 4.9 percent increase over the $198.8 million reported for 1992. Last year's net sales included $5.5 million from operations that were sold in the fourth quarter of 1992.
 The educational publishing segment's sales rose 3.5 percent in the third quarter. The School Division was down approximately 2 percent, reflecting reduced secondary school adoption opportunities in 1993. Elementary school revenues were up due primarily to strong reading sales. The Riverside Publishing Company's sales were up more than 50 percent, and the College Division net sales gain in the quarter exceeded 10 percent.
 General publishing sales rose 12.43 percent in the third quarter. Excluding Gollancz, which was sold in 1992, the net sales gain for the segment was 29 percent, and the Trade & Reference Division's revenues were up more than 20 percent. Reference, children's and adult publications all contributed to the Trade & Reference Division's results.
 Chairman and CEO Nader F. Dareshori said, "The company's third- quarter results confirm the effectiveness of the streamlining and re-engineering efforts that have been implemented over the last two years. This is best shown by the change in the company's operating margin. This year's third-quarter margin increased to 31.8 percent from last year's 27.9 percent. Houghton Mifflin is now more profitable and positioned to withstand the cyclical nature of our educational publishing business."
 Dareshori said, "We remain firmly on track to achieve full-year 1993 earnings of at least $2.20 per share, after the 55 cents per share in special charges and refinancing costs. Fourth-quarter results are expected to be slightly better than breakeven as continued cost benefits, good sales of college and trade books, and the acquisitions made in 1992 all contribute. For 1994, net income per share should at least equal the $2.75 estimated for this year excluding special charges."
 HOUGHTON MIFFLIN COMPANY AND SUBSIDIARIES
 Unaudited Consolidated Financial Information
 (Dollars in thousands except per share amounts)
 Three months ended Nine months ended 12 months ended
 Sept. 30 Sept. 30 Sept. 30
 1993 1992 1993 1992 1993 1992
 Net sales by
 industry
 segment: (a)
 Educational
 publishing $172,967 $167,115 $301,634 $302,722 $352,412 $354,578
 General
 publishing 35,543 31,645 77,801 73,804 105,203 100,385
 Total 208,510 198,760a 379,435 376,526 457,615 454,963
 Costs and
 expenses:
 Cost of sales 88,284 82,954 183,565 179,005 224,838 223,112
 Selling &
 administrative 53,882 60,283 134,552 144,224 180,444 187,163
 Special
 charges (b) --- --- 10,560 --- 10,560 ---
 Total 142,166 143,237 328,677 323,229 415,842 410,275
 Operating
 income(a,b) 66,344 55,523 50,758 53,297 41,773 44,688
 Other income
 (expense):
 Loss on
 disposition
 of foreign
 publishing
 operations (a) --- --- --- --- (13,527) ---
 Net interest
 expense (a) (831) (698) (2,160) (2,225) (2,274) (2,611)
 Income before
 taxes, extraord.
 item and
 cumulative effect
 of accounting
 changes 65,513 54,825 48,598 51,072 25,972 42,077
 Provision for
 income taxes 23,969 20,836 17,505 19,408 7,472 15,995
 Income before
 extraord.
 item and
 cumulative
 effect of
 accounting
 changes 41,544 33,989 31,093 31,664 18,500 26,082
 Extraord. item,
 net of taxes:
 Loss on
 extinguishment
 of debt(c) --- --- (1,002) --- (1,002) ---
 Cumulative effect
 of accounting
 changes:(d)
 Postretirement
 benefits, net
 of tax credit --- --- --- (13,357) --- (13,357)
 Inc. taxes --- --- --- (1,300) --- (1,300)
 Net income $41,544 $33,989 $30,091 $17,007 $17,498 $11,425
 Avg shares
 outstng. 13,846,201
 13,819,997
 13,808,550
 14,098,295
 13,786,836
 14,114,190
 Net income
 per share $3.00 $2.46 $2.18 $1.21 $1.27 $0.81
 Notes to Unaudited Consolidated Financial Information:
 (a) Includes net sales and operating results related to foreign units disposed of in the fourth quarter of 1992, as follows:
 (in thousands, except Three Months Nine Months
 per share amounts) Ended 9/30 Ended 9/30
 Net sales $6,351 $12,517
 Operating income (loss) 504 (2,175)
 Net interest expense (147) (367)
 Net income (loss) per share 3 cents (18 cents)
 (b) Includes workforce restructuring costs totaling $7.5 million; net costs of $2.2 million connected with the relocation and consolidation of publishing and support functions in the company's new Boston headquarters; and a $0.9 million charge for closing the Newark, Calif., warehouse.
 (c) In June 1993, the company completed an early redemption of $25 million of 8.78 percent Senior Notes due December 1994, resulting in an after-tax extraordinary charge of $1.0 million, or 7 cents per share.
 (d) Effective Jan. 1, 1992, the company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," and SFAS No. 109, "Accounting for Income Taxes." The non-cash, after-tax costs resulting from the adoption of both standards amounted to $14.7 million, or $1.04 per share. The results for the nine- and twelve-month periods ended Sept. 30, 1992, have been restated to reflect the adoption of both accounting changes.
 -0- 10/14/93
 /CONTACT: Susan E. Hardy, director of investor relations for Houghton Mifflin Co., 617-351-5114/
 (HTN)


CO: Houghton Mifflin Co. ST: Massachusetts IN: PUB SU: ERN

JL-DD -- NE001 -- 2012 10/14/93 08:30 EDT
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Date:Oct 14, 1993
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